By Claire Racine

London’s social enterprises plan to expand and grow their business to combat the current recession, according to a poll by Business Link, the freebusiness advice and support service backed by government.

Despite the current recession, the report finds little negative impact on social enterprises being able to access finance, as many look to develop new community projects.

Half of the 130 London social enterprises polled believed that the recession had created new business opportunities and 72% were planning for modest or substantial growth over the next three years.

“This poll highlights a growing entrepreneurial spirit amongst London’s social enterprises,” said Tamara Pekelman, business adviser at Business Link in London.

“The sector is of course not immune to the recession – nearly a third reported a fall in sales – but what’s encouraging is that many are actively looking for new areas that they can expand and grow their operations.”

Some social enterprises financing community projects reported an increased demand for credit services since mainstream banks have scaled back their lending, Pekelman said.

The snapshot poll also explored how the recession has impacted the ability of social enterprises to access finance with 82% reporting no change in their arrangements with banks or specialist social enterprise lenders.

The finding was confirmed through separate interviews with social enterprise lenders who reported no significant changes in lending practices due to the recession.

“In the first quarter of the year, the number of enquiries and applications were down, while the number and variety of applications appear to have returned to normal during the second quarter,” said Bruce Wood of the London Rebuilding Society, a social enterprise lender.

While most maintain a diverse revenue stream, the study also found that public funding is the predominant source of income for a significant proportion of social enterprises.

Furthermore, 75% had no plans to downsize their operations and 82% had no intention of making redundancies.

“Social enterprises play an increasingly vital role in long-term community regeneration and many see the balance of running a business and doing a social good as an attractive proposition,” said Pekelman.

The poll shows that the social enterprise sector is healthy, Pekelman said, with optimistic owners planing to make positive changes, such as up-skilling their staff.

“The challenge for business support services therefore is to make sure that social enterprises are equipped with the right tools so that they can fully exploit these growth opportunities,” Pekelman added.